IDEAS home Printed from https://ideas.repec.org/a/ids/ijecbr/v4y2012i6p639-658.html
   My bibliography  Save this article

Direct and indirect impacts of governance on the value of Brazilian corporations

Author

Listed:
  • Valdir De Jesus Lameira
  • Walter Lee Ness Jr.
  • Jean E. Harris
  • Osvaldo Luiz Gonçalves Quelhas
  • Roberto Guimarães Pereira

Abstract

This study estimated the quality of governance practices employed by a sample of publicly traded companies in Brazil between 2002 and 2006. It also explored the way quality of governance is related to three variables: risk, performance, and value. The Hausman test showed endogeneity between governance and value. Afterwards, the structural equations method was applied to construct various models involving the relationships among: a) governance; b) performance as measured by ROE (return on assets) and by ETS (ebit-to-sales); c) risk as measured by WACC (weighted average cost of capital); d) value as measured by MTS (market-to-book sales); e) by MTBV (market-to-book value). Statistically significant results were observed among high levels of governance, low risk, strong performance and high value. This suggests that governance affects the value of companies directly as well as affecting the value of companies indirectly through the mediating variables of risk and of performance.

Suggested Citation

  • Valdir De Jesus Lameira & Walter Lee Ness Jr. & Jean E. Harris & Osvaldo Luiz Gonçalves Quelhas & Roberto Guimarães Pereira, 2012. "Direct and indirect impacts of governance on the value of Brazilian corporations," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(6), pages 639-658.
    • Handle: RePEc:ids:ijecbr:v:4:y:2012:i:6:p:639-658
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=49531
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijecbr:v:4:y:2012:i:6:p:639-658. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=310 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.